Best Accounting Software for Very Small Businesses

Starting a business is never an easy thing, especially from the point of view of administration and accounting. However, there are online accounting solutions with which you can turn the usually boring accounting process into a hassle-free, automated task, so you can focus on making your business grow. Accounting solutions offer you clever invoicing, instant expense management and auto-created finance reports that aid you in analyzing and optimizing your business. Furthermore, they blend in well with other, third-party apps that you may already be using, so that you will find yourself doing your books with relative ease. Accounting software is fully scalable, so it can grow with your business and your accounting needs. And last but not least, they are relatively cheap; hence you not only save time, but money as well.

Simplest, Easiest Accounting Software

Online accounting solutions are designed to be simple and straightforward – in other words, you don’t need to be an expert to know how to deal with your software. Furthermore, if you still need help, the service providers are at your aid with tutorials, FAQs, knowledge bases and an always-ready customer support.

Some accounting solutions even have built-in guides, so you can learn the basics with the example in front of you. This way you can see that accounting can be a fun and interesting task, rather than a complex chore. Invoicing is usually the easiest and most advanced feature of these programs, especially if you have estimating as well (as estimates can be turned into invoices). Most solutions also feature a time tracker, project and expense management, an inventory, a dashboard displaying your bank feed and much more, whether you access everything from your computer or a mobile device. But the most important thing is that reports are created automatically, ergo your accountant just needs to confirm it and the hardest part of tax reporting is done.

Scalability in Mind

Unless you are intentionally keeping your business small, chances are that your clientele will grow, not to mention you might end up employing one or more people as well. Online accounting solutions are prepared for this with multiple plans tailored to different business sizes: there are cheaper ones intended for micro business owners like you, and more complete ones for full-fledged SMBs and enterprises. Quite often all pricing plans contain the same features, including access for your accountant to verify your books, but sometimes you have to upgrade to get those extra options you want.

Speaking of missing features, do not write online accounting off just because it misses an important feature. Instead, try out one of the biggest strengths of these solutions: third-party app integration. Integrated apps can complement even the simplest cloud-based accounting software, turning it into a full powerhouse. Furthermore, they can replace the accounting solution’s own features with a more advanced one or, and this is of utmost importance, can partially or fully automate tasks you would normally do with a pinch of salt.

Recommended Online Accounting Software

Although most online accounting programs, like Xero, FreshBooks and QuickBooks Online, are intended for SMBs, they can also be used by micro businesses without remorse. So without further ado, let us present you these three stellar options for very small businesses.

QuickBooks Online

QuickBooks exists in a version intended for self-entrepreneurs: for as low as $5 per month you can send/track simple invoices, manage your business expenses, maximize Schedule C deductions, get automatically calculated estimated taxes and track your mileages. However, the main product, QuickBooks Online might be an even better option: for as low as $10 per month you get a full-fledged SMB-grade accounting solution with everything you need, including easy invoicing, expense tracking, estimating, bank account and third-party app syncing. By upgrading to other plans you get access to instant business reporting, an inventory and the option to prepare and print 1099s. Although all prices are reduced for the first 6 months, keep in mind that if you take advantage of the 30-day free trial (unavailable for QuickBooks Self-Employed), you have to pay the full price.

InvoicingReportingTaxing

Creating an Invoice in QuickBooks Online

The Auto-Created Reports

Tax Filing via QuickBooks Online

FreshBooks

Out of our three recommendations, FreshBooks has the most convenient pricing policy: the more you pay ($15, $25 or $50 per month) the more clients you can bill. However, none of the features are limited in neither plans, and you are always entitled to try FreshBooks out for free for 30 days. Speaking of features, you get everything your smaller business needs, such as easy invoicing with late fees, automated reminders, and the option to choose from multiple languages, currencies and taxes. You can create full projects for better organization and track your own time so you can bill your clients on an hourly basis. Everything, including your expenses and your bank feed, can be displayed on your visually appealing dashboard, while automatically created reports have their own separate tab. Last but not least, FreshBooks is available for mobile devices as well in the form of a full-fledged iOS/Android app.

InvoicingTime TrackingDashboardReports

Invoicing in the FreshBooks App

Time Tracking in FreshBooks

The Software’s Dashboard

A FreshBooks Sales Tax Report

Xero

Often considered the king of accounting solutions, Xero is definitely a good choice if you are planning to grow your business. All pricing plans (with the lowest starting from $6.30 per month) include the mandatory accounting features like invoicing, quoting, recording of expenses, reconciliation of bank transactions and automated business reporting. Furthermore, you can also enjoy integrations with over 400 third-party solutions, an iOS/Android app for mobility, 24/7 customer support, reduced prices for the first 6 months and a 30-day free trial. However, keep in mind that Xero Starter is rather limited: only 5 invoices/quotes, 5 bills and 20 bank reconciliations are allowed. Thus, for the truly unlimited Xero experience, you should opt for Xero Standard ($21 per month), especially if you are thinking ahead.